Carbon tax could be $120B windfall
CALGARY A $120-billion opportunity exists for companies that can help reduce Canada’s emissions, according to a new report, as the federal government plans its tax on carbon and as companies like TransAlta Corp. shift toward renewables more quickly than expected.
Boston-based Lux Research published a report Thursday that estimated Canada’s carbon tax plans could generate $120 billion in tax revenues by 2030 and that money “can be funnelled toward domestic technology innovators.”
“While it remains to be seen how Canada’s provinces will spend the billions in tax revenues, proper allocation of funding can eventually position Canada as a global hot spot for innovations,” Lux Research senior analyst Yuan-Sheng Yu said in a release.
Yu’s report predicts that Canada would become “a destination for global technology developers” and that clean-tech providers targeting the transportation and waste-management sectors are the best positioned to profit from the transition. Yu said there were also opportunities for power companies to generate earnings from the country’s transition to lower its emissions.
It is released at a time when the federal government is planning to directly invest $1.8 billion from its federal budget in clean-technology companies and as companies in multiple sectors have begun planning ahead for a Canada-wide $50-per-tonne carbon tax in 2022.
“Carbon is now an input, so like any other thing, as the cost of an input goes up, you want to minimize it,” TransAlta Corp. president and CEO Dawn Farrell said Thursday, adding that a $50 per tonne carbon price makes converting her company’s coal-fired power plants to natural gas more economic.
TransAlta, a major Alberta power company, announced Wednesday it would accelerate its planned retirement of coalfired generating stations from 2029 to 2023, mothballing some power plants and converting others to burn natural gas. The Lux report predicted that “Canada’s electricity sector will shift from (being the country’s) third-largest emitter to the second-lowest in less than 20 years.”